Friday, June 26, 2009

Volume 09, Issue 19

 

CONFERENCE COMMITTEE BEGINS WORK ON STATE BUDGET A conference committee tasked with resolving the differences between the House- and Senate-passed versions of the state’s next budget began its work on June 24. Each house passed its version of the budget pretty much along party lines. (The House version passed on a strict party line vote with 52 Democrats supporting it and 48 Republicans opposing it; the 33-17 vote in the Senate saw Sen. Frank Mrvan [D-Hammond] joining 32 Republicans to vote for the budget and Sen. Vaneta Becker [R-Evansville] opposing it along with the 16 other Democrats.)

 

Both Houses expedited the process to the extent they could within their rules so as to allow conferees as much time as possible to resolve the differences between the two versions of the bill. The House passed its version on June 18, and the Senate passed its version on June 23. Later in the day on June 23, the House dissented from the Senate version, and both houses appointed their conferees and advisors. The conferees, as expected, are each party’s highest ranking member of the budget-writing committee in each house.

 

The conference committee is being chaired by Rep. Bill Crawford (D-Indianapolis), who is the author of the bill and chair of the House Ways & Means Committee. Other conferees are: Rep. Jeff Espich (R-Uniondale); Senate Appropriations Committee Chair Luke Kenley (R-Noblesville); and Sen. John Broden (D-South Bend). Advisors to the House conferees are Democratic Reps. Dennis Avery (Evansville), Terry Goodin (Austin), Sheila Klinker (Lafayette), Scott Pelath (Michigan City) and Peggy Welch (Bloomington); and Republican Reps. Randy Borror (Fort Wayne), Jeff Thompson (Lizton) and Eric Turner (Marion). On the Senate side, the advisors will be Republican Sens. Gary Dillon (Pierceton), Brandt Hershman (Wheatfield) and Teresa Lubbers (Indianapolis); and Democrat Sens. Lindel Hume (Princeton), Tim Skinner (Terre Haute) and Karen Tallian (Michigan City). These are the same conferees who were unable to produce a budget that could pass both houses during the regular session. The conference committee report that did reach the floor of both houses on the last day of the session did so only after House Speaker Pat Bauer (D-South Bend) replaced Rep. Espich with Rep. Pelath.

 

The special-session process began with Governor Mitch Daniels offering his budget recommendation for the 2010 – 2011 biennium and issuing the basic parameters he required for a budget he would sign into law. The Governor indicated that General Assembly members could maneuver spending and appropriations within those parameters as they chose but also that he would not sign a budget if it did not retain a reserve of at least a $1 billion or if it raised taxes on Indiana citizens. Subsequently, he indicated that the Senate-passed version of the budget met these parameters and he would sign it. He also indicated that the one-year budget passed by the House was unacceptable to him because the funding for programs such as corrections and Medicaid that are certain to demand more money during fiscal year 2011 would, in his opinion, require either a tax increase or an inappropriate depletion of reserves.

 

A significant difference between the two bills is the length of time each is designed to cover. The House-passed version covers only the fiscal year beginning July 1, 2009. The Senate version covers the full biennium through June 30, 2011. This difference allows the proponents of both to claim their budget is balanced and does not deplete reserves beyond acceptable levels. Democrats claim that the one-year budget will give the economy a chance to rebound and that the budget for the 2011 fiscal year should be set next winter when legislators have a better idea of what resources are really available. Republicans, including Governor Daniels, counter that there are only six months left in 2009 and that we know that in that short period of time the economy will not recover to point where there will be significant increases in state revenue. Moreover, they argue, the one-year budget spends most of the federal stimulus money the state expects to receive and ignores the inevitable increases in corrections and social programs that will come in the second year.

 

Legislators in both parties are genuinely concerned with funding education, as is the Governor. Republicans point out that both the Governor’s budget and the budget passed by the Senate actually increase funding for public education while most states in the country are finding it necessary to cut funds for education. Democrats, on the other hand, contend it is not enough.

 

Meanwhile, Farm Bureau’s Katrina Hall is working to convince the budget conferees to include in the final bill language that will address an unintended consequence of legislation passed in the regular session. In an effort to prevent abuse of the homestead deduction, HEA 1344 (Rep. Cherish Pryor, D-Indianapolis) prohibits corporations and other business entities from claiming it. However, the language of the bill is such that it also prevents a farmer whose principal residence is titled to a farm corporation, partnership or limited liability company from claiming the exemption as well. Rep. Pryor, Rep. Joe Pearson (D-Hartford City), Rep. Dale Grubb (D-Covington), Sen. Marlin Stutzman (R-Howe), Sen. Brandt Hershman (R-Wheatfield) and Sen. Lindel Hume (D-Princeton) are all working with Farm Bureau to resolve this issue.

 

CONTINUING RESOLUTION PASSES SENATE, FALTERS IN HOUSE  A contingency measure – characterized by its author, Senate President Pro Tem David Long (R-Fort Wayne), as an effort “to keep the lights on” should the legislature fail to pass a budget before the start of the new fiscal year on July 1 – passed the Senate 32-18 on Tuesday. The bill, SB 1 (Special Session), was not referred to a committee in the House, and Speaker Pat Bauer has indicated that he is not interested in funding the state through a continuing resolution. In the Senate debate, Sen. Long argued that this represented no more than a judicious contingency assuring that the state would continue to provide vital services even if there is no budget bill. Democrats, led by Senate Minority Leader Vi Simpson (D-Bloomington), argued that the continuing resolution would take the pressure of a deadline off the legislature. Sen. Simpson said she was not willing to concede that the General Assembly could not do its job. SB 1 (Special Session) passed the Senate by a 32-18 vote with Sen. Jean Leising (R-Oldenburg) joining the 17 Democratic senators to oppose it.